For the initial measurement of PPE which of the following elements contribute to the determination of the cost of an item? 1) Cost of testing if the asset is working properly 2) General expenses 3) Cost of site preparation 4) Operation reorganizational costs 5) Abnormal costs relating to acquisition, construction or installation 6) Installation and assembly costs   Select one: a. 1, 4 and 5 b. 1, 3 and 6 c. 2, 4 and 6 d. 1, 2 and 4

Which of the following would NOT be included in the cost of an item of property, plant, and equipment? Select one: a. the purchase price net of any trade discounts and rebates b. costs of obligations associated with the asset’s eventual disposal c. costs of training employees to use the asset d. delivery costs

1. Depreciation is best described as a method of a. Asset valuation b. Current value allocation Cost allocation C. d. Useful life determination 2. All of the following factors are considered in determining the useful life of an asset, except a. Expected usage of the asset b. Expected physical wear and tear c. Technical obsolescence d. Residual value 3. Technical or commercial obsolescence arises from a. Expected usage of the asset b. c. Expected physical wear and tear Change or improvement in production or change in the market demand for the product output of the asset d. Expiry date of related lease of the asset 4. The production method of depreciation results in a. Constant charge over the useful life of the asset. b. Decreasing charge over the useful life of the asset. c. Increasing charge over the useful life of the asset. d. Variable charge based on the expected use or output of the asset. 5. What factor must be present under the production method of depreciation? a. Total units…

Reproduction value is theA. Estimate of cost of reproducing, creating , developing or manufacturing a similar assetinternallyB. Salvage value of the assetC. Net value reflected in the company’s financial statementsD. Cost of similar assets that have the nearest equivalent value as of the valuation date

The critical issues in accounting for tangible assets are recognising cost incurred as an expense or an asset and the measurement of initial costs and subsequent expenditure. MFRS 116 Property, Plant and Equipment provide guidance on these critical issues. Please give explanation in details and example

Under the cost model, subsequent to initial recognition as an asset, an item of property, plant, and equipment shall be carried at a. Revaluation Amount b. Cost less accumulated depreciation and accumulated impairment losses c. Revalued amount less accumulated depreciation and any accumulated impairment loss d. Cost

Which of the following expenditures would be included in the cost of a fixed asset? Oa. Sales taxes Ob. Vandalism Oc. Uninsured theft Od. Mistakes in installation

Which of the following gross valuation methods on a building would most likely be used by a construction firm in its financial and management accounting of its projects? a.) Unit in place b.) Quantity survey method c.) Square Footage method d.) none of the above

1. What are the two main characteristics of intangible assets? 2. Why does the accounting profession make a distinction between internally created intangibles and purchased intangibles? 3. What are the factors to be considered in estimating the useful life of an intangible asset? 4. What is the nature of research and development cost? 5. Indicate the proper accounting form the following items. Organization Cost Advertising Cost Operating Losses

An initial cost of an item in PPE includes:   subsequent expenses purchase price administrative expenses salvage value